Factory Locations

By: System Administrator On: 2013-05-09 23:58 (18852 Reads)

Diffusion of Factories
The manufacturing of goods in factories began in the United Kingdom in the late 1700s because of the second Industrial Revolution. Factories from the United Kingdom diffused eastward through Europe and westward across the Atlantic Ocean to North America. While the first factories in North America were found in the late 1700s and the early 1800s, they stayed and were found in roughly the same areas in the 1900s.

Traditional Areas in Europe (most important listed first)

*United Kingdom — Traditionally, the earliest industrialized country. Today, does the most to lower taxes, lower regulations and attract outsiders to do new high tech industries
*Rhine-Ruhr River Valley — Central location with a river and a port and nearby coalfields and is ideal for steel production
*Mid-Rhine — Second to Rhine-Ruhr in importance for central Europe. but nearer to the consumer market. High value goods that require specialized skills. (Frankfurt, Mannheim, and Stuttgart)
*Po Basin(Lake Erie) — Oldest and most important for southern Europe 2/3rds of Italy's manufacturing
*Northeast Spain — In Catalonia and contains many foreign owned car factories
*Moscow — Fabrics and skilled labor goods and traditionally industrialized area for Russia
*St. PetersBurg — Shipbuilding
*Volga — Refineries
*Urals — Mining here so metal fabricating and refining processing here
*Kuznetsk — Coal Iron and Steel
*Donetsk — Coal, Iron, and gas
*Silesia — Steel and coal

Diffusion of Factories in the United States
In the 1900s, factories in the United States were located in primarily in the north. The south was not as eager to accept factories due to their customs. As a result of the factories located in the north, a megalopolis (heavily populated urban area that runs continuously through numerous cities) was formed in the north. This could also be considered the industrial belt, where a great number of factories were located which led to the quick modernization and urbanization.

Some cities located in the industrial belt were: Milwaukee, Chicago, Toronto, Hamilton, Buffalo, Cleveland, Pittsburg, Baltimore, Wilmington, Philadelphia, New York, and Boston. These, of course, were not the only cities located in this area.

The Traditional Core Area is the Current Rust Belt

The Industrial Belt (Rust Belt today)

Today, however, many of the factories that were once located in the north have now either been taken down or relocated. The industrial belt was stripped of its industry, thus being renamed as the rust belt. A few cities survived this removal of industry well by making the necessary changes to their economies. Examples include Chicago and New York City. However, there are other cities, such as Detroit, that could not maintain their development after the removal of industry. The prices of houses went down, and many areas of the city are vacated. This is also not the only issue, however, because as the United States loses its factories, people also lose jobs.

As the north is already quite industrialized, there is no need for more factories to be built. Some still remain, and some are changed into housing. If a factory were to be built in the United States today, it would be located in the south and/or west, where the areas are less modernized. Because these areas are less modernized, land, employment, raw material, and taxes would all be cheap and this would be beneficial to the company to have. Today, the south is called the Sunbelt. This results in a change of migration patterns as more people move to those areas in search for jobs. This is similar to the Great Migration, where 1.75 million African Americans moved to the northern states in search of jobs in the 1910s to 1930s while industry was big.

Deindustrialization in The United States

As the north of the United States de-industrializes, factories are relocated and carried over the border to Mexico, where maquiladoras are formed or are relocated to China or other countries.

Corporations that have factories located in other countries are called TNCs (trans-national corporations) or MNCs (multi-national corporations).

Many factories are also relocated as a result of NAFTA (North American Free Trade Agreement) because of the benefit to freely transport good across the borders.

The WTO (World Trade Organization) promotes international trade, thus also promoting the relocation of the United State’s factories to other countries.

The relocation of factories benefit the countries to which the factories are sent to by increasing their GDP, HDI, and GDI,

But the conditions in factories across borders are often worse. Some complaints about factories in Mexico are low wages, no health insurance, underage children working, poor treatment, and the need to buy one’s own material.

Changing Locations of Industry
Within the United States
-Decline in the rust belt
-Adding jobs into the south and some in the west
-Unlike the 1800s, South now has infrastructure
-South has cheaper labor, lower cost of living, and lower taxes
-Southern states have open shop instead of closed shop laws for unions (not all workers have to join unions)
-This has happened with clothing as well

Within Europe
-Government policies favor less developed areas of Europe
-EU sees shift of labor to new and poorer EU countries
-Many jobs going to East and South parts of EU (Spain and Poland are examples)

International Shifts
-East Asia Expect China to increase in its importance as a manufacturing area. Currently, one of three major industrial area of the world. Includes South Korea. Containorization plays a role in the increase here. South Korea is big on steel.
-South Asia Led by India. India dominates in textiles. Growing in vehicle production. Expect India's GDP to match the USA by 2050.
-Latin America Nearest low wage region to the USA.